Nature and purpose of reserve:
Security Premium: This is the premium received on issue of equity shares and will be utilised as per the applicable provisions of the Act
General Reserve: This amount is transferred from the retained earnings and will be utilised as per the applicable provisions of the Act
Retained Earning: This comprises of net accumulated profits of the company after the declaration of dividend.
Notes:
(i) Total Open Cash Credit limits of Rs.6000 lakhs [(Current Year Rs.2000 lakhs with Kotak Mahindra Bank and 4000 lakhs with HDFC Bank), (Previous Year Rs.2000 lakhs with Kotak Mahindra Bank and Rs.4000 lakhs with HDFC Bank)]; Total FUBD backed by LC Rs.3000 lakhs [(Current Year Rs.2000 lakhs with Kotak Mahindra Bank and Rs.1000 lakhs with HDFC Bank), (Previous year Rs.2000 lakhs with Kotak Mahindra Bank and Rs.1000 lakhs HDFC Bank)] carries interest @ 6 months MCLR 0.55% p.a. for Kotak Mahindra Bank, and @Tbill 3 months 2.43% p.a. for HDFC Bank (Previous year @ 6 months MCLR 0.55% p.a for Kotak mahindra Bank, and @ 1 year MCLR 0.50% p.a. for HDFC Bank), and secured by hypothecation of all raw materials, work-in-progress, finished goods, receivables and collaterally secured by book value of unencumbered fixed assets of the company consisting Plant & Machinery of Wind Mills at Ramagiri and Fixed assets i.e Land & Buildings, Plant & Machinery and other assets of Lead Units situated at Choutuppal and Tirupathi (including land and building of corporate office at Hyderabad), and till the renewal of limits kotak Mahindra bank during 11th April ,24 & HDFC Bank during the 31st Jan 25
The Company's financial liabilities comprise short-term borrowings and trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's financial assets include trade and other receivables, cash and cash equivalents and deposits.
The Company has a Risk Management Policy based on which risks are identified, measured and managed. The Board of Directors review these risks and related risk management policy.
The different kinds of risks the company exposed to and its mitigation is discussed as under:
I) Market risk:
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and commodity price risk.
(i) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's raw material purchase activity. Such foreign currency exposures are mostly hedged by the Company.
(ii) Commodity price risks
The Company is effected by the price volatility of lead in the open market. The company's operating activity requires supply of lead on a continuous basis. Due to significant volatility in the lead price, the Company enters into purchase contract with vendors wherein the prices are linked to the quoted London Metal Exchange rates. Similarly, the Company's selling price of lead to battery manufacturers are linked to such rates.
As the Company's significant revenue is linked to cost of lead, the impact of change in lead prices on Company's profit is not expected to be significant.
II) Credit risk :
Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).
Trade receivables:
Impairment analysis is performed at each reporting date on an individual basis for all the large customers. In addition to a number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.
The calculation is based on historical data of credit losses. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in these financial statements as the Company does not hold collateral as security.
The Company has evaluated the concentration of risk with respect to trade receivables as low based on historical data. Capital Management :
The Company's objective when managing capital (defined as net debt and equity) is to safeguard the Company's ability to continue as a going concern in order to provide returns to shareholders and benefit for other stakeholders, while protecting and strengthening the Balance Sheet through the appropriate balance of debt and equity funding. The Company manages its capital structure and makes adjustments to it, in light of changes to economic conditions and strategic objectives of the Company.
Note no 30: Contingent Liabilities and commitments :-
(to the extent not provided for)
(A) Contingent Liabilities:
(i) Claims against the company not acknowledged as debt:
a) The Commissioner of Central Excise, Tirupati, had issued a show-cause notice C.No.127/TCCE/2014-Adjn. (C.Ex.) dated 03.09.2014 alleging short payment of central duty on clearances of excisable goods manufactured in the guise of job work and cleared the same to M/s. Amara Raja Energy & Mobility Limited. Subsequently, three more periodical Show Cause Notices were also issued on the same issue. Details of the Show Cause Notices are provided below:
The main contention of the Show cause notices were that M/s. Nile Limited has cleared job worked goods to M/s. Amara Raja Energy & Mobility Limited and claimed exemption under Notification No. 214/86 dated 25.03.1986, however, the said exemption is not available to M/s. Nile Limited inasmuch as they have contravened the provisions of the exemption notification as when providing job work services on the goods of M/s. Amara Raja Energy & Mobility Limited, M/s. Nile Limited had used their own inputs to manufacture the final products and therefore are not eligible for the said exemption.
The above Show cause notices were adjudicated and decided by the Commissioner of Central Tax, Tirupati vide Order-in-Original No. TTD-EXCUS-000-COM-03 to 06-19-20 dated 31.07.2019. The adjudicating authority had confirmed the above demands along with interest and penalties.
M/s. Nile Limited has filed an appeal along with a pre-deposit appeal amount of Rs.1,24,84,822, before the Hon'ble Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Hyderabad against the order passed by the Commissioner of Central Tax, Tirupati. The issue is pending before the CESTAT and has not been listed as of 31.03.2024.
The Company's Legal Counsel confirmed the validity of the appeals filed by the company in the above matters. Considering the Legal Advice, the demand has not been provided for, but disclosed as a Contingent Liability.
(ii) Guarantees and letters of credit:
(a) Letters of Credit issued by Bankers - Rs.50.87 lakhs (Previous year - Rs.NIL) .
(b) Customer bills discounted with Banks backed by LC - Rs. NIL/-(Previous year NIL)
(c) Customers bills discounted with Banks - Rs. NIL (Previous Year Rs. 460.46 lakhs)
(iii) Other money for which the company is contingently liable:
Amount claimed by a supplier, not accepted as liability - Rs.197.74 lakhs (Previous year Rs. 197.74 lakhs). The City Civil Court, Secunderabad, in their order dated 2nd June, 2016, directed the company to pay Rs.39.22 Lakhs plus interest @18% p.a. from the date of filing of the suit till the date of realisation.
The company preferred an appeal before the Hon'ble High Court at Hyderabad. The Hon'ble High Court on 31st October, 2016 gave an interim stay on the trial court's order, and directed the company to deposit Rs.60 Lakhs to the credit of the suit. Accordingly, the Company deposited Rs.60 Lakhs to the credit of the suit. Based on legal opinion, no liability will arise to the Company in this regard.
(iv) Corporate Guarantee provided for the Project/Term Loan sanctioned by Axis Bank to the company's wholly owned Subsidiary having a limit of Rs 40 Crores and outstanding Rs 11.38 crores as on 31.03.2024.
(B) Commitments:
Estimated amount of works remaining to be executed on capital account, net of advances - Rs. NIL/- (Previous Year Rs. NIL)
There is no adverse impact of pending litigations on the Financial Position of the company.
Note no 31: Leases (Ind AS-116):
The Company has taken certain equipment under non-cancellable operating lease agreements for a period of 72 months. The lease rental charges during the year ended March, 2024 is Rs.36.75 lakhs (Previous year Rs. 36.75 lakhs) and maximum obligation on long-term non-cancellable operating lease payable as per the respective agreements are as follows:
The company has classified various benefits to employees as under:
A) Defined Contribution Plans: i) Provident Fund:
Provident fund is operated through the Regional Provident Fund Authority under the scheme. The company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits. This fund is recognized by Income tax authorities. The company has recognized the following amounts in the Statement of Profit and Loss for the year:
B) Defined Benefit Plan
i) Gratuity
ii) Leave Encashment
Leave encashment is payable to eligible employees who have earned leaves during the employment and / or on superannuation as per the Company's policy.
*Reasons for the Variances above 25%:
a) The Increase in Current Ratio is mainly due to reduction in Bills Discounting and Working Capital Loan with the Banks.
b) The Reduction in Debt-Equity Ratio is majority due to repayment of CC loans at the end of the year and reduction in Borrowings.
c) The Increase in Debt-Service Coverage Ratio is majority due to downfall in Interest payments Borrowings and increase in profits of the company.
d) There is an increase in Trade Payable Turnover ration due to hike in Purchases and utilization of Stock during the year.
e) There was a decrease in Profit from Investment in MF as it was invested only for a part of year compared to PY.
f) There is an increase in margin and thereby having an increased Net Profit ration compared to PY.
Note no 36: Disclosure U/s.186(4) of the Companies Act, 2013
(i) Loans given, guarantees issued, security provided - as below (PY : Nil)
Loans granted to Wholly Owned Subsidiaries without specifying any terms or period of repayment ( Interest Charged at 10 year Bond yield rate - 7.11%)
(ii) Investments made:
Name of the company in which investment was made and Amount of investment:
1. Nirmalya Extracts Pvt Ltd - Equity Instrument - as reported in note 33 above
2. Nile Li-Cycle Pvt Ltd - Equity Instrument - as reported in note 33 above Note no 37: Other Disclosures
1. The company has complied with the number of layers prescribed under Clause 87 of Sec.2 of the Act read with the Companies (Restriction on number of layers) Rules 2017.
2. During the year, no scheme of arrangements has been approved by the competent authority in terms of Sec.230 to 237 of the Act, in which the company is a party.
3. a) The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other
sources or kind of funds) to any other person(s) or entity(ies) including foreign entities (intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary shall (i) directly or Indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries); or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
b) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
4. Additional Regulatory Disclosures to the extent applicable has been reported in the Notes to Accounts.
Other Points :
(i) In the opinion of the board, the assets other than fixed assets and non-current investments, have a value on realization in the ordinary course of business of at least equal to the amount at which they are stated in the balance sheet.
(ii) Previous year's figures have been regrouped wherever necessary to confirm to the layout adopted in the current year.
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